Game Changers for Growth

New information and communications technologies were game changers that boosted the potential growth rate of the US economy in the 1990’s. New research suggests that shale energy and big-data analytics will be game changers with similar benefits for the US economy’s potential growth over the next several years.

BERKELEY – The recent G-20 meeting of finance ministers in Saint Petersburg confirmed that the debate between growth and austerity is over – at least for now. With protracted recession in Europe and slowdowns in emerging markets, concern about budget deficits has given way to apprehension about growth. In July, the International Monetary Fund revised its global growth forecast downward for the second time this year.

Both Japan and the United States stand out as bright spots in the subdued global outlook, but for different reasons. In Japan, Prime Minister Shinzo Abe has unleashed a combination of aggressive monetary and fiscal expansion along with promised reforms of the labor market, corporate governance, regulation, and trade.

In response to rapid and bold stimulus measures, Japan’s economy is expected to grow at a rate of around 3% this year – one of the highest rates among advanced economies – and the Nikkei index rose 80% in the six-month period ending in May of this year. Now Abe has signaled his intention to move forward with tough structural reforms. If he delivers, his policies will be game changers for Japan.

Laura Tyson, a former chair of the US President’s Council of Economic Advisers, is a professor at the Haas School of Business at the University of California, Berkeley, a senior adviser at the Rock Creek Group, and a senior external adviser to the McKinsey Global Institute.

Tyson does not spend much time on the negatives, like water use. farms being sold, and pollution. Any financial gains from these growths , unless they are fundamentally reallocated will lead to more 1% 99%

Tyson like many economists substitutes the phrase "structural reform" for clear exposition. It has no fixed meaning. Sometimes "structural reform" means any social change that would lower wages, other times any social change that would boost exports, still other times any social change that would boost productivity.

One thing for sure, the advocates of "structural reform" have good intentions.

Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a "mini-bubble" is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled."

Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years. A report released in March by the Berlin-based Energy Watch Group (EWG), a group of European scientists, undertook a comprehensive assessment of the availability and production rates for global oil and gas production, concluding that: "... world oil production has not increased anymore but has entered a plateau since about 2005." Crude oil production was "already in slight decline since about 2008." This is consistent with the EWG's earlier finding that global conventional oil production had peaked in 2006 - as subsequently corroborated by the International Energy Agency (IEA) in 2010

FRACKING OUR WAY TO A TOXIC PLANET
Elevated levels of methane, ethane and propane gases were found in drinking water wells in Pennsylvania, close to operations that shake natural gas loose from underground shale formations in a process known as fracking, scientists reported on Monday. Based on analysis of 141 drinking water wells in northern Pennsylvania that sit atop a natural gas-rich underground formation called the Marcellus shale, Mr. Johnson and his colleagues found 82 per cent of drinking water samples contained methane, with concentrations six times higher for homes within 1 kilometre of natural gas wells than for homes farther away.
Ethane concentrations were 23 times higher for homes close to natural gas wells; propane was detected in 10 drinking water wells, also within 1 km of a natural gas well.

POISONING OUR LAND
Over the past several decades, U.S. industries have injected more than 30 trillion gallons of toxic liquid deep into the earth, using broad expanses of the nation's geology as an invisible dumping ground. No company would be allowed to pour such dangerous chemicals into the rivers or onto the soil. But until recently, scientists and environmental officials have assumed that deep layers of rock beneath the earth would safely entomb the waste for millennia.
There are growing signs they were mistaken (or lying of course)

Technology also makes for less jobs and lots of low paid jobs to punch pictures on cash registers, stoves, etc Computers calculate everything from that point. Inventory, status of maintenance etc, is almost instantaneous. One accountant and one repairman replace 10 and on it goes.
A low paid , low educated , low recreation and leisure mass is the growth to be concerned about. Private education is corporate education, not helping in the above areas. Educated people now in low paying jobs simply because most jobs are low paying should be paid to enhance the lives of the masses. Low paid people who get a rounded education should be part of this effort. A low paid , low educated tense and stressed class is a great expense to carry. It is a boomerang in waiting. Let the elite go get educated to be efficient. Educate the masses not to kill each other and have living conditions were that is not what comes to mind.

One of the key applications, prospectively, for knowledge generation, is a more satiated, consumer-oriented society, that focuses on intangibles. If that is desirable from an economic point of view, it may also be desirable from the citizen's point of view, when this process generates intellectual qualia for their empirical enjoyment.

The value system is what I call 'aesthetic epicureanism', a joint word that means an aesthetic elite with no class qualifications. It seems like these people (including myself, to some degree) might be able to float some issues at minimal expense. For example, what if they are more intellectually productive than the money available for their schooling? Or what if they can feel stimulated by public works, rather than expensive consumer objects? If the public works are consumer-oriented, there is a lot of potential to grow the aesthetic epicure market.

In a way, some of the process is an inevitable trend that has little to do with strategy goals, since the perfection of information and sensation lies along the path of the development of technology anyway. For example, it is highly compatible with the presence of robots and AIs in society. It's also a way of selling independence to those that would otherwise feel alienated by virtual reality. The role of modular citizenship, with a bunch of cheap incentives having to do with intellectual progress and collective media and or consumption.

I think very well of Ms. Tyson but I am not as optimistic about the future as she is.

We have a very distorted income distribution curve which cuts into middle class purchasing power not to mention an almost hopeless growing underclass. We are cutting back on R&D; education has become cost prohibitive for many at the same time that advanced education has become essential for the nation’s competitiveness. Many of our states are deeply in debt which will result in state and city pension reductions cutting into the purchasing power and the tax base of a growing segment of our population while the medical needs of that group will grow.

Shale gas is a problem in that drilling for it releases large amounts of methane gas which is about 4 to 5 times worse than CO2 for climate warming. Moreover, drilling for it requires large amounts of water which will be increasing scarce in a drier future. If we disregard these problems we are playing with fire.

In the absence of any game changing high investment inventions such as the computer or the Internet we will be looking an economy driven largely by maintenance, replacement and incremental improvement. Whether these will be able to cut into our unemployment and purchasing power problems remains to be seen.

Our foreign policy elite insist on maintaining an expensive military establishment with over 1000 overseas military bases while they try to run world, which in view of the fact that we can hardly run ourselves is a bitter joke.

Politically we are deeply divided on fundamental issues reinforced by ridged ideological approaches which make dealing with our problems doubly difficult if not impossible. Need one say more.

Laura Tyson and lots of economist do not calculate pollution expense or social expense. The whole concept of growth forever getting us out of recessions, with those creating whatever growth of this type there is walking off with the lions share of income ,looking to put that income back in to the same type of endeavor without a fundamental change in the allocation of the wealth derived from such endeavors is foolhardy. It is more of the same. 1% 99%

Laura Tyson and lots of economist do not calculate pollution expense or social expense. The whole concept of growth forever getting us out of recessions, with those creating whatever growth of this type there is walking off with the lions share of income ,looking to put that income back in to the same type of endeavor without a fundamental change in the allocation of the wealth derived from such endeavors is foolhardy. It is more of the same. 1% 99%

Laura Tyson and lots of economist do not calculate pollution expense or social expense. The whole concept of growth forever getting us out of recessions, with those creating whatever growth of this type there is walking off with the lions share of income ,looking to put that income back in to the same type of endeavor without a fundamental change in the allocation of the wealth derived from such endeavors is foolhardy. It is more of the same. 1% 99%

Laura Tyson and lots of economist do not calculate pollution expense or social expense. The whole concept of growth forever getting us out of recessions, with those creating whatever growth of this type there is walking off with the lions share of income ,looking to put that income back in to the same type of endeavor without a fundamental change in the allocation of the wealth derived from such endeavors is foolhardy. It is more of the same. 1% 99%

Laura Tyson and lots of economist do not calculate pollution expense or social expense. The whole concept of growth forever getting us out of recessions, with those creating whatever growth of this type there is walking off with the lions share of income ,looking to put that income back in to the same type of endeavor without a fundamental change in the allocation of the wealth derived from such endeavors is foolhardy. It is more of the same. 1% 99%

The world is much, much more economically equal now than 30 years ago. A billion people have escaped poverty and entered the middle class.
And, by the way, if you count the value of employer provided health care in the US, middle class wages have risen in the last 30 years.

I fully agree with your analysis.
This article reflects the prevalent official point of view.
What happened is that leaders, management structures all over the globe forgot that human society is primarily about people.
Our whole system should be about normal people, their lives, future, safety.
Instead today we can only read about markets, growth, financial institutions, political and corporate measures, structures.
There is nothing about the people any longer.
And the people as you yourself noted are slowly but surely falling off the train, indeed the middle class is already weakened and will be further weakened.
Social inequality, unemployment is steadily growing, education is insufficient as basically it is simply about providing good workers (provided they can get a job) and consumers, not educating human beings.
Health systems are about money, numbers and statistics while in many places, even in leading western societies, the number of people that can get decent treatment is declining rapidly.
If we wanted to go deeper into analyzing it we would get a very distorted, almost insane picture.
The human being is left out of modern human society.
I cannot share the optimism of this article, nobody will be able to solve the multi-faceted global crisis until we build a new human society that is based on the well-being and mutually responsible and complementing contribution of the people.

I fully agree with your analysis.
This article reflects the prevalent official point of view.
What happened is that leaders, management structures all over the globe forgot that human society is primarily about people.
Our whole system should be about normal people, their lives, future, safety.
Instead today we can only read about markets, growth, financial institutions, political and corporate measures, structures.
There is nothing about the people any longer.
And the people as you yourself noted are slowly but surely falling off the train, indeed the middle class is already weakened and will be further weakened.
Social inequality, unemployment is steadily growing, education is insufficient as basically it is simply about providing good workers (provided they can get a job) and consumers, not educating human beings.
Health systems are about money, numbers and statistics while in many places, even in leading western societies, the number of people that can get decent treatment is declining rapidly.
If we wanted to go deeper into analyzing it we would get a very distorted, almost insane picture.
The human being is left out of modern human society.
I cannot share the optimism of this article, nobody will be able to solve the multi-faceted global crisis until we build a new human society that is based on the well-being and mutually responsible and complementing contribution of the people.

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The Mueller report in America, along with reports of interference in this week’s European Parliament election, has laid bare the lengths to which Russia will go to undermine Western democracies. But whether Westerners have fully awoken to the threat is an open question.

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